I have several friends who either have had or will have a baby in the next coming months. I’d like to get a gift that would give the child a good financial start. Bonds have been the traditional gift for years, but I’m not sure the return on them makes for a very good long term investment. I’m looking to give something around $75.
The next question is whether I should give the gift to the child or the parents. I’ve heard that financial gifts in the child’s name could limit his/her ability to get financial aid when the time comes. On the other hand, there are rumors that my fiancee’s parents used money given by her grandparents for themselves (not that they didn’t raise her, spending much more money overall). Any thoughts on this?
Lastly, I wouldn’t have a social security number for the gift and wouldn’t want to use my own – it would probably just confuse things. So hopefully this won’t be a problem. I appreciate any ideas you might have.
Update: For grandparents, aunts, uncles, and other relatives: do you and the family of the newborn live in Canada? Consider opening an RESP Canada savings plan for the future post-secondary education of the baby. Money can grow tax-free until it is withdrawn, and anyone can contribute over the years. It’s a thoughtful gift idea that should help the new parents worry a little less about starting a savings account for their child.